RECOVERY has long seemed a transient guest in America. As recently as last summer, a return to falling output seemed a real possibility. On the surface, the latest GDP figures hardly suggest a decisive turn for the better. According to preliminary estimates of fourth-quarter output, the economy expanded at a 3.2% annualised pace, up a bit from a 2.6% rise in the third quarter, though below economists’ forecasts. But a closer look suggests that America’s economy may at last be approaching something like strong growth.

At 3.2%, the rise in GDP is disappointing for this stage in a recovery. At a similar point in the early 1980s business cycle, annual growth was roaring ahead at 7.1%, and employment was growing rapidly. Now the American economy is running a full $800 billion (5.7%) short of its potential output, and only in the fourth quarter did GDP finally pass its pre-recession peak. But the headline figures are misleading.

As demand grew late in 2010, consumers purchased more than the economy produced. This meant that inventories shrank. On the national accounts this inventory decline shows up as a 3.7 percentage-point drag on total growth, but is also evidence of strong demand. Real final sales—GDP minus inventory changes—surged ahead at a 7.1% annual rate in the last three months of the year. That was the best quarterly performance since 1984, and up substantially from the meagre 0.9% annualised growth in the third quarter.

Economists are cautious. Inventory declines often go with a drop in imports, and the fourth quarter was no exception. The drop in inventory may presage surging imports as firms restock, meaning that growing demand will simply flow abroad, as has often happened. But there are signs that America’s persistent trade imbalances are eroding. America’s trade deficit shrank for a third consecutive month in November, as exports grew faster than imports.

In late December, the dollar resumed a decline that has been interrupted only by periodic European crises. A weakening dollar reduces the cost of American goods abroad, supporting export growth. A yawning trade deficit with China persists, and the dollar’s fall against China’s currency, the yuan, proceeds at a glacial pace. But China’s soaring wages and prices are undermining its international cost advantage.

Early signs indicate even better conditions in 2011. America’s first manufacturing report of the year showed activity accelerating to the fastest level since 2004. Markets have shrugged off international crises to attain highs last seen in June 2008, before the Lehman crisis. For the first time in this recovery, the underlying economy looks independently strong, unaided by government stimulus or cyclical factors.

.......

Meanwhile, the weakness in labour markets continues. Private-sector firms added 187,000 workers in January, according to a private employment report, following a gain of 247,000 in December. These figures, up from an average increase of only 52,000 over the previous six months, may signal a thaw in hiring conditions. But employment is still scarcely 1% above its post-recession lows. Until Americans can count on a reviving economy to produce new jobs they will be sceptical about recovery, and growth will remain vulnerable.

Effective policing requires to know when backing down is in the best interest of public safety. By all accounts, the culture of the Ferguson Police was ignorant of that fact, and instead treated Cartman of South Park as a role model for how to be a police officer.

Effective policing requires to know when backing down is in the best interest of public safety. By all accounts, the culture of the Ferguson Police was ignorant of that fact, and instead treated Cartman of South Park as a role model for how to be a police officer.

Truth be told, if I owned a 20-man business, I wouldn't want to hire Americans either.

I thought you were opposed to immigration.

I have no real position on legal immigration. I oppose illegal immigration on principle.

But that is beside the point: I have money saved for an IRA that I really don't know how to invest -- every investment** seems like a trap these days. Extrapolating that, if I owned a business, and if I had the capital to hire new employees (particularly expensive American ones), I wouldn't choose to do so in this environment.

edit** I should clarify: Every investment that is available to me as a US resident investing my meager sum in an IRA. The economic activity taking place abroad is only indirectly captured by standard IRA investments.

Poor excuse. The jobs aren't there because businesses are afraid to hirer -- liquidation rates are highest in something like 40 years. They'll try to boost productivity of workers they currently have until they are forced to increase employment in order to keep up production.

Or 5 man business. It doesn't matter, except that if I had the money, I would choose not spare the expense of hiring risky and expensive American employees.

Well I suppose I was just referring to the lack of this type of traditional business in the modern economy. Everything is done in a centralized fashion by large corporations.

But regarding the 'expensive' American employees - they're actually too cheap. It is precisely the fact that they are paid too little which has trapped us in a deflationary depression. That's not to say that your stated preference as an employer isn't rational - it is, but it dooms you and everyone else to a poor economic outcome. In other words only the State can save capitalism, and only be 'overpaying' the workers.

The amount of time for the jobs to recover in recessions since the Great Depression has followed the pattern where the last 4 recessions took the longest, and in that order.

This current recession will clearly be the longest.The 2001 recession was the second longest at 46 monthsThe 1990 recession was the third longest at 30 monthsThe 1981 recession was the fourth longest at 27 months

The amount of time for the jobs to recover in recessions since the Great Depression has followed the pattern where the last 4 recessions took the longest, and in that order.

This current recession will clearly be the longest.The 2001 recession was the second longest at 46 monthsThe 1990 recession was the third longest at 30 monthsThe 1981 recession was the fourth longest at 27 months

This is the nature of capitalism. Without a high level of government control of the economy and massive redistribution, it declines - both by quick collapses and a long slow enervation.